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  • By The Financial District

Farmers In Western U.S. Sell Cows As Drought Worsens

Extreme drought and inflationary pressures are forcing US farmers in Western states to sell off their cattle herds in greater numbers, at levels not seen in over a decade, Vanessa Yurkevich reported for CNN Business.

Photo Insert: Because inflationary costs for things like feed, fertilizer, and fuel are only making the situation worse, many cows are headed to auction.

Nearly 80% of the western region of the US is experiencing extreme drought conditions — and has been for nearly a year, according to the America Farm Bureau Federation (AFBF). But the most recent week-long heatwave, impacting nearly 80 million people across the country, has brought things to a boiling point for farmers and ranchers.

Temperatures in Texas have remained around 100 degrees for weeks, depleting water and burning grass -- both critical to feeding and maintaining cow herds. Some ranchers say their only option is to sell.

"We haven't had this kind of movement of cows to market in a decade, since 2011, which was our last really big drought," said David Anderson, a professor of Agricultural Economics at Texas A&M. Last year, severe drought in the West forced 40% of farmers to sell off part of their herds, according to an AFBF survey.

Now, inflationary costs for things like feed, fertilizer, and fuel are only making the situation worse. Many cows are headed to auction. The small sale barn in Elk City, Oklahoma which services four small counties normally sees 200-300 cows on sale day.

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Last week they saw 1,000, according to Monte Tucker, a state board member of the Oklahoma Farm Bureau. Tucker, a fifth-generation cattle rancher himself says he's holding out selling his cows until there is no more grass for them to eat. He's supplementing his herd's food with seed — but it's proving to be very expensive.

While ranchers are reluctant sellers, they are at least getting a good price at market, according to Anderson. That could eventually mean lower prices for consumers. The price of ground beef for American consumers in June was up 9.7% over the last year.

Market & economy: Market economist in suit and tie reading reports and analysing charts in the office located in the financial district.

But the concern is future prices. With smaller herds and fewer breeding cows, the next two years could spell higher beef prices for consumers. The US Department of Agriculture, or USDA, is projecting a 7% decline in beef production next year.

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